Baroness Scotland of Asthal: My Lords, a number of reports have been published on anti-social behaviour orders and their application, and noble Lords will have had the advantage of debating them. It is important to recognise that this new report identifies that anti-social behaviour orders have been very successful. Sixty-five per cent of people desisted from anti-social behaviour after one intervention,86 per cent desisted after two interventions, and as many as 93 per cent desisted after the third intervention. There have been a number of reports and they are telling us that we are doing well and that, although we need to go further, this is a success.

Baroness Scotland of Asthal: My Lords, the issue of ethnic monitoring has been considered. The Together website talks about standing together and the action that we are going to take. The noble Lord knows that disproportionality is a matter that we continue to keep under review. I shall ensure that we highlight this matter for my honourable friend the Minister responsible for that part of the portfolio.

Lord Bradshaw: My Lords, the noble Lord is quite right. That is the situation at the moment. Soon there will be smart-card readers. Once the card is enabled, like the Oyster card in London, one will not have to engage the driver at all. It is not there yet but that is on the way. As well as in Scotland, smart cards are being introduced in Blackpool, in the north-west,in Lancashire, in Cumbria, in south Yorkshire and in Oxford and, of course, we have the Oyster card in London.
	We should move quickly to an ITSO-compliant smart card, nationally available and compatible throughout Great Britain. There will be some risks. The Minister made great play of the fact that there will be much consultation on this, but the schemeis supposed to be introduced in April 2008, so there is limited time for consultation. Decision time, which is not well beloved of Ministers, is very close. They will have to decide whether to go forward with a smart card rather than spending lots of time consulting on it. There are risks and costs, but the rewards are substantial. First, there is much reduced scope for fraud by both the user and the operator. There is currently nothing to prevent an unscrupulous operator from pressing the button several times for non-existent passengers. Secondly, there will be a much better system of reimbursement for operators, targeted to where people actually use buses.
	If we have national scheme, the money can go to where people are using buses. For example, lots of people come to Blackpool in the summer, but the Blackpool Corporation currently gets no money from them. Bus operators in honeypot areas—be they Edinburgh, Blackpool, London or wherever—should get some reward for what they provide. We could have one set of centrally negotiated national reimbursement rates, and consider a growth factor where operating costs have demonstrably increased. In some cases, there are so many extra people using the buses that more have to run. Providing more buses is expensive.
	Where they exist, passenger transport authorities should be the conduit for the money. Otherwise, district councils, which are not transport authorities, should not be involved in smart cards, the cash flow or negotiations with operators. Where those district councils are highway authorities, they should concentrate on the issues of the free flow of buses in their area. Bus drivers, who have a difficult enough job anyway, should not be involved except to see that a valid smart card is presented to the card reader on the bus. That could well speed up boarding times and shorten journey times.
	I understand that my proposal moves risk to government, although much of the work involved can be outsourced to some other organisation. If a local authority wishes to extend their scheme's scope, they should be able to do so, as the Minister said. I suggest that that should be at their expense, however.
	Although there are risks, their evaluation will quickly become evidence-based because there is a record of every journey. That opens the way to revising, if anybody wants to, the system of bus service operators grant. Smart cards depend on each bus having a card reader, like the buses in London. Fitting those will have a cost, but smart cards should be regarded as the golden key, bringing rationality to a sprawling and rather shambolic system of bus-user subsidy and appealing to the Secretary of State.
	As the Minister said, the Bill is enabling legislation; real meat will appear in the regulations. I hope that real discussions will take place with all involved, mapping a quick way forward. I wish the Bill every success and hope that the Minister will take account of what I have said.

Lord Smith of Leigh: My Lords, like other noble Lords, I broadly welcome the Bill. By providing nationally the benefits of the travel concessions introduced in April 2006, the Bill will enable many of the vulnerable groups in society to have better mobility and encourage them to shift to a more sustainable form of public transport. The existing schemes have been very successful. In Scotland there has been a 95 per cent take up and in our area it is about 90 per cent. However, I am grateful that the Minister's friends on the Back Benches have left because I have some concerns about the Bill which I hope we can address in a serious way. I fear that, unless we do so, we will not be able to sustain the benefits in the Bill.
	I start by declaring two interests. Although I am entitled to receive a senior citizen's card, I am one of the 5 per cent of those who have not claimed their card. As noble Lords will be aware, I am also the leader of a local authority. I have taken the opportunity to consult a number of my transport colleagues and PTEs.
	Like the noble Lord, Lord Bradshaw, my first concern is about funding. The Minister confirmed in his speech that up to £250 million will be available to fund the scheme. On what basis was the calculation made? Or was it simply a matter of putting up a finger and making a good guess at what it might cost? Given the success of existing schemes and rapidly rising off-peak fares, in particular—I think that until this summer off-peak fares in my area were increasing by roughly 12 per cent annually—the cost could be significantly more.
	The more critical issue is how we distribute the money around the country. As my noble friend Lady Quin said, the distribution of funding for the current scheme was particularly harsh to the Tyne and Wear area, which did not receive enough money. That reflects the vast complexity of the system of distributing money which makes England more difficult to deal with than Scotland. We still rely on the formula of my noble friend Lord Barnett, devised more than 30 years ago as a temporary, stop-gap measure, which determines the way in which money travels around the country. So some of the money in the pot for schemes in England ended up in Scotland, a little ended up in Wales and some went to the Isles of Scilly which, although in England, do not have any buses, so I am not sure why they need any money to fund travel concessions on buses. The Government need to reflect on the fact that the current funding does not reflect the high usage of buses in urban areas that my noble friend mentioned.
	I am not too concerned about the problem mentioned by the noble Lord, Lord Bradshaw, about the system in metropolitan areas. PTEs are not precepting but levying authorities, so the money goes to the metropolitan and district councils which have to fund the PTE through a levy. Once the levy has been agreed, that is the sum that must be paid, so it is not such a problem.
	The distribution of funding for the proposed scheme will be even more difficult than under the current scheme. Additional patronage on buses will not be evenly spread across the country. Urban centres and tourist areas will receive a greater increase in bus usage than other areas. We need to find a way of covering special events. In 2008, Liverpool will be the European Capital of Culture; that will inevitably generate exceptional visitor numbers, many of whom will qualify for the scheme. We must make sure that there is enough money to cover that. We have to find a more sophisticated way of distributing the money around the country than the current formula allows.
	My second concern is about bus operators. Our experience is not as sanguine as some. As my noble friend mentioned, it is partly down to deregulation. It is the 20th anniversary of deregulation—an example of 20 years of failure. In our areas, bus fares have gone up considerably more than the rate of inflation and bus patronage has not increased, it has gone down. In London, the exact opposite is true because they retain the right of regulation. In Wales there is a perverse incentive for bus operators to raise off-peak fares so that they can claim more money in the reimbursement. We face the constant problem that where bus operators regard a bus route as non-commercial, they may withdraw the service or try and persuade the PTA or other authority to fund it. Ultimately, pensioners may have free fares but much less frequent bus services.
	On reimbursement, we must make sure that bus operators are no worse off under the scheme than they would otherwise have been. Under the current scheme, 44 appeals against the form of reimbursement have taken place in five or six PTEs. Depending on the results, significant amounts of public money could be at risk in those areas. We need to develop a workable model for reimbursement which will work across the country.
	I was somewhat surprised to see Clause 9 in the Bill. Given that the local government White Paper is in favour of devolution, the clause will enable the Government to take over and run a system which is currently run pretty effectively by local authorities. I wonder how many people other than civil servants believe that a system of travel concessions that people have to access locally can be run better by the Department for Transport in Whitehall than it can locally. I just do not believe it, and it is against the principle the Government are announcing in other measures.
	I support all that was said by the noble Lord, Lord Bradshaw, about the need for smart cards, which are the way forward. This is where the Government should play a role. They should make sure that all the bus operators and transport authorities get together to produce a smart card that works everywhere and has the most up-to-date technology. We need to do it quickly, though, because if we leave it too late we will not be able to do it in time for the Bill.
	I was pleased that when my noble friend introduced the Bill he announced that there were ongoing discussions with all sides to ensure the improvements in the Bill could be achieved. I welcome that, but again there are constraints, partly because of the Bill, but also because we are into the planning stage for April 2008, and unless we know exactly what the system is, it will not be implemented. It is a good scheme; let us hope we can work to improve it and ensure that it will be possible to give pensioners the benefits we all want to see.

Baroness Scott of Needham Market: My Lords, I join in with the general welcome offered to the Bill. I assure the Minister and the rest of the House that comments from me and my noble friend Lord Bradshaw are very much in the spirit of wanting to see a Bill that is fit for purpose and that will achieve the objectives we all seek.
	The first legislation I dealt with when I came to the House in 2000 was the Transport Act, to which I tabled amendments to bring in a national concessionary fares scheme. I need not explain all the reasons why I thought that would be desirable because the Minister has just outlined them very well. There is only small satisfaction in saying "I told you so". I really would have preferred that these provisions had been brought in originally; then we would not be changing the legislation now. I mention that mainly to express my preference that some of the concerns raised during the passage of this Bill be taken on board, so that we do not end up coming back in a few years' time to put right things that are already identified as problematic.
	I am a member of the Commission for Integrated Transport. Around two years ago, under the chairmanship of Professor David Begg, we had a look at concessionary fares. While supporting a national scheme, the commission did not come out in favour of free fares for the elderly. We were heavily lobbied by pensioners, especially by Professor Begg's mother, who gave him a fairly severe handbagging for not supporting free transport. However, we were making the point that if the pot of money available was limited, perhaps some of it would be better spent on extending the groups to whom half fares would be available; for example, carers for disabled people and, particularly, children in full-time education. The Government did not support the commission's view and have gone forward with free travel, but I welcome the fact that it may be possible to extend the provisions of the scheme to those other groups, because that is important.
	The changes to the concessionary fares regime in recent years have led to a number of problems which have not yet been fully worked through and addressed, and which need to be considered carefully before we progress any further with the current proposals. The main issue for local authorities is that, while it is always possible for central Government to argue that they have funded a scheme totally, often the outcome has not been positive for individual authorities. That is always the result where funding has been based on variable inputs, such as population, demographics or economic indicators, rather than the outputs, as in this case; that is to say, how many trips are actually made. My noble friend Lord Bradshaw highlighted the need to think about a scheme that measures outputs rather than the rate support grant formula.
	We heard from the noble Baroness, Lady Quin, and the noble Lord, Lord Smith of Leigh, about the problems faced by PTAs, particularly in Tyne and Wear, where Nexus has been forced to cut some services, to abolish the teen fare scheme and raisethe child concessionary fare. That is an example of the law of unintended consequences. I am sure that the Government did not intend the outcome of, in some areas, children from poor families subsidising pensioners who are better off than they are.
	The shortfall in Bath and north-east Somerset this year is estimated to be around £680,000 because the grant distribution scheme has not recognised the level of bus use in Bath, which is much higher than the national average. In this case, Bath is actually being penalised for having had bus-friendly policies. The same issue was raised by Devon County Council, which has seen an increase from 4.6 million to9 million concessionary passenger journeys, costing an extra £2 million a year.
	Some issues need to be taken into account as we move forward. First, higher costs have accrued because more people are demanding passes. I gather that take-up in Scotland is now 95 per cent—it appears to be 100 per cent among noble Lords from Scotland in this House. In Exeter, for example, 78 per cent of eligible residents now have passes. That is highly desirable, but it shows why we need to have realistic estimates of take-up. There has been a hugely increased demand for services, much higher in Scotland and Wales than predicted, and, as I mentioned, equally so in English authorities.
	There is no doubt that bus fares are rising above the RPI. That is partly because of high industry costs, an issue which my noble friend Lord Bradshaw has raised in your Lordships' House on a number of occasions. However, there is another concern. As the number of fare-paying passengers decreases compared with the number paying concessionary fares, there is a potential disincentive for operators to keep fares down. Normal market mechanisms are being distorted. As fares increase, the public purse bears the burden for concessionary fares and fare-paying passengers bear the burden for others. The operators themselves have expressed concern about that. In this week's Transit magazine, a respected bus operator asked,
	"what other business has had the all-important economic lever of its pricing policy so undermined?".
	There is evidence of an increasing number of appeals by operators against the reimbursement levels. As the noble Lord, Lord Smith of Leigh, mentioned, many of those are still outstanding, which adds to the uncertainty about future costs. My noble friend Lord Bradshaw is absolutely right in saying that we need to consider whether a less bureaucratic scheme could be introduced.
	These are major issues for local authorities, which face severe financial pressures, especially in social care budgets. If they are to face shortfalls in public transport provision, they will have to cut other budgets or, as is more likely, cut the public transport budget or increase the council tax. Given that it is envisaged that this scheme will be up and running by April 2008, this is a fairly ambitious timetable, and there is very little detail available about the administrative structures that will be used. There are previous examples of when government have faced problems due to rushed legislation and regulation.
	Set-up costs have been estimated at anything between £35 million and £75 million, depending on how the scheme is set up. How will those costs be met, and by whom? Will the passes be able to be procured nationally, which would save costs and ensure consistency and interoperability, so that they can be recognised right across the country? I add my support to my noble friend Lord Bradshaw and the noble Lord, Lord Smith of Leigh, in saying that, as the passes are developed, they must be capable of moving on to smart card technology.
	I am very interested to hear what the Minister has to say about cross-border operations. The matter of travel between England, Scotland and Wales is very significant along border areas. I am interested in what exactly he means by saying that the Government will judge whether the English scheme is successful before extending it. What sort of criteria does he have in mind when judging success? Will his department bear in mind that, if making these passes useful across borders is the ultimate outcome, the scheme needs to be set up to ensure that that can happen from the outset?
	The noble Lord must accept that hackles have been raised and suspicions aroused by the clause which includes the possibility of changing the level at which these decisions are made, particularly at a time when local government structures are being so carefully looked at. It seems extraordinary to make the argument for cost saving by making a national scheme and then not include such provision in the Bill. If that had been done, we could either argue for or against it and we would know where we were. It seems rather odd that the noble Lord made the case for the measure in his opening speech, did not include it in the Bill but kept the relevant power.
	Like other noble Lords, including the noble Lord, Lord Low, I welcome the possibility for widening the scope of the scheme, for example to include community transport schemes. In rural areas such as the one where I live such schemes are far more important than bus services. Community transport schemes are the only way forward in deeply rural areas, where there are very few bus services. In areas where there is a light-rail system or schemes such as the Croydon Tramlink, it is vital for integration that the concessionary scheme should include both of those.
	I look forward to Committee, when many of these issues will no doubt be aired further.

Lord Hanningfield: My Lords, I am pleased to have the opportunity to speak on this small yet significant Bill and I am happy to say that we support its aims and objectives. However, we have a number of reservations, not least regarding its funding and implementation, as several noble Lords have said. Therefore, many of my comments will echo those made by others. Like them, I have a number of questions relating to how the Bill will operate in practice. However, I hope and trust that these concerns can be swiftly sorted out so that we can all support the Bill as it makes its way through the House.
	As the Bill is to be effectively run and administered by local government—I, too, have strong reservations about the Secretary of State running it—I declare an interest as leader of Essex County Council. We all recognise that the ability to travel is particularly important for pensioners and disabled people as it gives them the opportunity to engage with local communities, combating isolation and helping them to lead full, independent lives. We applaud the efforts that the Government have taken over recent years in this regard. I do not often applaud the Government but I do on this occasion.
	As the Minister mentioned, the Bill enhances the statutory minimum travel concession of free off-peak travel for pensioners and disabled people on local buses anywhere in England. Local authorities wish to work with the Government to ensure the successful delivery of this scheme by 2008. However, to do so requires sound legislative, funding, reimbursement and administrative arrangements, some of which are as yet not clear, as others have said.
	This is a challenging project to deliver within the time scale set by the Government, as several noble Lords have said. Experience in Essex, where some time ago a countywide scheme similar to the one before us today was introduced, suggests that funding by the Government was insufficient for some district councils. In the end the county had to help out. This in turn put at risk sensible arrangements for those who should enjoy the benefits of the scheme. Other district councils had to provide extra resources from their own finances. Finance is a big issue, as the noble Lord, Lord Smith of Leigh, pointed out.
	While local authorities have an important role to play, this is a national scheme therefore local authorities must be given sufficient funding to make it work. The mechanism by which this will happen has not yet been determined. Several versions have been mentioned today. I share doubts about administering the scheme through revenue support. Most counties in England are at floor level, as are many London boroughs. As to putting money into the revenue support grant, we do not get it. How will we put extra money in to fund such a scheme? The funding of the schemes needs to be carefully thought through.
	Changing the tier at which the scheme operates will have significant effects on how the funding will be sorted out. Whatever arrangement is settled on, the key principle must be—and we must watch this as the legislation goes through—that local councils will be fully funded for the new scheme and will suffer no financial risk. Indeed, authorities already have full flexibility to determine whether a scheme operates at district or county level, so I cannot understand the Minister's proposal on that; it could be left as it is.
	I repeat that I would not want to see the Secretary of State having the power, even if it was a reserved one, to run a national scheme. I agree with the noble Lord, Lord Smith of Leigh, that we have just had a White Paper on devolution, and suggesting a national bus scheme seems to be going about it in totally the wrong way.
	Bus operators must also be adequately reimbursed to ensure that the commercial network remains at its present level and does not put additional burdens on local authorities again. Therefore, perhaps the Minister could clarify today—and if not today, in Committee—how the funding might become available and on what basis. It would be useful if the Minister commented on that today; otherwise, we will have to pursue it in considerable depth in Committee.
	Local authorities and several noble Lords today have expressed concerns about whether the scheme can be up and running by the date intended by the Government. In particular, there seems to be doubt about whether the new passes required for the national concession could be in place by 2008. Perhaps the Minister could update us on how the "re-stickering" of existing passes, together with the implementation of a cost-effective procurement system, could be completed by that time.
	I wish to probe the Minister on other issues that the Bill flags up, some of which have been raised by noble Lords today. What consideration have the Government given to extending the scheme to other transport modes? In some areas, concessionary fare passes can be used in taxis, community transport and other door-to-door transport modes. In Scotland, as we have heard, many ferry journeys are covered bythe concessionary fares scheme. In urban areas, concessions are often also available on local rail and light-rail services. That is important where train and tram services are used as an alternative to the bus for local journeys. It would seem sensible to at least look at the possibility of extending the concession to other types of transport. I remind the Minister that, while we have heard quite a lot about urban areas today, in some rural areas there is not even a bus service to talk about. We would like to see what will come out of this for rural areas.
	Does the Minister agree that the restriction of concessionary travel during morning peak periods could have a detrimental effect on disabled people travelling to work or looking for work? Here, I support much of what the noble Lord, Lord Low, said. Employment for blind people is often in lower-paid jobs, as he said; therefore, having a concessionary scheme during peak times would be very important to them. In addition to the effect on employment, restricting concessions to off-peak times affects disabled people travelling to an early medical appointment, appointments for benefits and other interviews, or education and leisure activities with an early start time. I hope the Government might reconsider that for disabled people, particularly the blind, as the noble Lord, Lord Low, stated. Why did the Government choose to operate the scheme on a basis excluding peak hours? Can the Minister tell us how much more the scheme would cost to operate if it were extended to cover that period?
	There also appears to be some concern, especially among groups campaigning on behalf of the disabled, regarding the definition of the term "disabled" as used in the Bill. Again, I support the noble Lord, Lord Low. Therefore, for the avoidance of doubt, would it not be better if an agreed definition were specified in the Bill and in guidance which includes all disabled people whose impairments affect their ability to use public transport, including those with mental health issues? I would welcome any clarity that the Minister could provide today.
	Putting Passengers First was published today by the Secretary of State. I have just seen it but I do not think that anyone has had a chance to scrutinise it. Perhaps the Minister could say whether that document has any effect on the Bill.
	In conclusion, I repeat that we on these Benches are happy to support the principle of this Bill, which brings greater freedom and independence to some of the most vulnerable in society. However, while we understand the significant legal, financial and administrative arrangements that have to be made, we remain concerned at the lack of a clear project plan for the delivery of the Bill's objectives and, more importantly, the lack of a clear assurance on funding issues. As ever, we will try to clarify and seek answers to our questions in Committee.

Lord Davies of Oldham: My Lords, I am grateful to all noble Lords who have spoken. Given the impressive array of local government expertise present among them, I am not surprised to have been challenged about how local authorities deal with a scheme intended to bring benefits nationwide in England.
	I recognise the crucial role that local authorities will play in arranging such services. The only point that I wish to make at this stage is obvious. The noble Lord, Lord Bradshaw, emphasised local authorities' crucial role, as did the noble Lord, Lord Hanningfield. Both were supported by other noble Lords, who, for the best of reasons, emphasised the advantages of the earliest possible introduction of a smart card that would operate throughout England, and expressed the hope that it would soon cover the whole of the United Kingdom. There is an element of contradiction in emphasising the local dimension as well as the need for solutions that can be thought of only in national terms.
	There are bound to be pleas for greater clarification of some aspects of the scheme, but we are taking part in negotiations on it and there is much work to do before we can envisage introducing the wholly desirable concept of a universal smart card. While I do not concede that the Government are less enthusiastic than noble Lords opposite about the advantages of such a scheme, the practicalities of implementing it are substantial.
	This Bill seeks to put myriad local arrangements into a national scheme for England. Several contributions, including that of the noble Earl, Lord Mar and Kellie, emphasised how comparatively advanced Scotland is on a national scheme. I am not sure that I entirely accept his contention that that has been due to the minority contribution of the Liberal Party in Scotland, but he is bound to make that point. There have been rather more Labour Ministers concerned with the development of that policy in Scotland, but I hear what the noble Earl said.
	It is bound to take us time to get the scheme up and running. We aim to have the scheme for England in place in 2008, but the full reciprocal arrangements for Wales, Scotland and Northern Ireland are bound to take time. When I responded to my noble friend Lord Foulkes, who, regrettably, is not able to be present at this stage in our deliberations, I sought to clarify that I shared his obvious enthusiasm for reciprocal arrangements. We are already engaged in the discussions, but I hope that the House will recognise that it will take time to put the English scheme and the reciprocal arrangements in place right across the United Kingdom.
	The same applies to the minor points with which the noble Lord, Lord Hanningfield, opened his speech. He said that he was only really concerned about funding and implementation. Well, surprise, surprise: it would be amazing if the noble Lord were not interested in those things; so are the Government. Funding and implementation lie at the heart of effective policy, but I hope he will understand that we are creating the legislative framework within which the funding and implementation issues can be worked out. I accept that we shall be able to discuss some of these issues in more detail in Committee, but the Bill is about identifying the necessary powers and strategy to put in place an England-wide scheme in 2008.
	By the same token, I am not at all surprised that the noble Lord, Lord Low, with his enthusiastic and effective advocacy for the case of the disabled, argues about categories and asks why the scheme should not operate before 9.30 in the morning and at rush hours. We all know the basic answer to that. I accept what the noble Lord said about the advantages of no such restriction operating on the use of transport by our fellow disabled citizens at those times, but there are very acute pinch-points in transport usage at peak hours in many parts of the country. My noble friend Lady Quin identified that we have to tread very carefully when it comes to increasing pressure on services, which at present are often stretched. I recognise the validity of her point that Tyne and Wear, as a transport authority, was presented with acute difficulties. That was a source of great dismay to her, given that she was so far forward with her concept of how this legislation might work, as envisaged in her own Bill a few years ago. I understand her keen interest. She will know that we have taken some steps to remedy the position in Tyne and Wear, and we have learnt from that the necessity of meeting the objectives of all noble Lords. When we implement this legislation, it has to work effectively and fairly, but there are acute difficulties.
	We have to be careful about trying to have the issue both ways. On the one hand, several noble Lords contended that they were mightily suspicious of any suggestion that power should move upwards from the local level and that the scheme should depend on anything beyond the local authority for implementation. At the same time, it was emphasised that, first, it was necessary to bring in the scheme as rapidly as possible to make it fully contingent with the Scottish, Welsh and Northern Irish schemes so that we have a universal position, and, secondly, that the permit to travel, which would guarantee the scheme's smooth-working, should receive appropriate recognition. None of that is easily resolvable with local idiosyncrasies. It will be necessary for us to have effective discussions with local authorities to iron out these issues for implementation in 2008. This scheme cannot work without a universally recognised valid permit across England. The issue of smart cards is a little more sophisticated than that and will take longer. I accept that a valid travel permit will need to be recognised across all areas of England.
	I was also pressed on where buses end and coaches start—or perhaps it is the other way around—as the half-fare subsidy will continue for coaches. Nothing in the Bill changes that. On that point, the definition of a local bus service is one where bus stops are within15 miles of each other. We will operate the system on that criterion.
	I reassure the noble Lord, Lord Low, that the definition of "disabled" in the Bill will not change. In this legislation we will use the same definition that governs entitlement.

Lord Hunt of Kings Heath: My Lords, with the leave of the House, I shall repeat a Statement made by my right honourable friend the Secretary of State for Work and Pensions in another place. The Statement is as follows:
	"With permission, Mr Speaker, I should like to make a Statement on the Government's proposals to make it easier for more people to save for their retirement. "Despite the welcome fact that people are living longer, millions of employees are either not saving at all or not saving enough for their retirement. As the Pensions Commission noted in its second report, we must take steps now to tackle this problem of under-saving or face serious problems in the future."We have already acted to make sure that the state pension provides a solid platform on which people can save. The Pensions Bill published last month will create a simpler and more generous state pension. The restoration of the link to earnings will result in a basic state pension that, by 2050, will be worth twice as much in real terms as it is today."More generous qualifying conditions will, for the first time, properly treat social contributions on an equal footing with cash contributions—delivering fairer outcomes, especially for women and carers. "These and other changes will reduce the extent of means-testing in the future, making sure pension credit continues to be targeted at the people who would otherwise have been poor in retirement or who only have small savings. But we must build on this foundation by giving more people greater incentives and opportunities to save for their retirement."Overall participation in occupational schemes has been falling since the late 1960s, and disproportionately high charges are making the personal pensions market uneconomical for those on moderate to low incomes, who often stop contributing to private schemes after a short period of time. We will therefore be bringing forward legislation to create new low-cost personal accounts as the catalyst for a new savings culture in our country."This White Paper sets out proposals to give every employee in Britain earning more than £5,000 the statutory right to receive a contribution from their employer towards an occupational pension. Provided that they take responsibility by contributing to their pension from their own wages, employees will be entitled to an employer contribution of 3 per cent of their salary in a band between approximately £5,000 and £33,500. We will fix the level of employer contributions in primary legislation. "From 2012, employers will automatically enrol their employees into personal accounts or into their own existing occupational pension scheme, as long at it meets the specified minimum standards. This simple but radical step will affect around 10 million employees in Britain and will be vital in overcoming the barriers that prevent many people making the decision to save. There will be a compliance regime to protect the right of employees to be automatically enrolled and receive an employer contribution. We will consult on the detail of this approach, but expect it to build on the light touch model for the national minimum wage."We intend to establish personal accounts along the lines proposed by the Pensions Commission. The Pensions Bill provides for the creation of a Personal Accounts Delivery Authority, an independent body with financial sector expertise that will in the first instance advise the Government on the design of the operational structure of the accounts and prepare to get the necessary contractual arrangements with the private sector in place. It will then be responsible for commissioning the infrastructure to deliver the scheme from the private sector. The authority will eventually be replaced by a new personal accounts board, which will be responsible for the live running of the accounts. Its decisions will be independent of the Government. "Evidence suggests that moderate-to-low earners prefer not to make a choice of pension scheme administrator. Our approach will offer greater simplicity for savers and maximise participation levels. There will be a choice of funds for those who want it, which we expect to include the options of social, environmental and ethical investments and branded products. For those who do not want a choice, there will be a default fund."Low charges are critical to ensuring that people build up the maximum pension fund from their savings. The Government estimate that the long-term costs for personal accounts will be in line with those set out by the Pensions Commission of around 0.3 per cent of funds under management or even lower. Together with reduced marketing costs, this approach is expected to be 20 to 25 per cent cheaper than a system based on direct competition between firms for individuals. "These reforms are designed to fill a gap in the existing market. We want them to complement the existing market, not compete with it, so alongside the creation of the new personal accounts we will take action to support existing pension provision. There will be no transfers into or out of personal accounts from or to existing pension schemes, and an annual limit will restrict the level of contributions that individuals can put into their accounts. This will be £10,000 in the first year to allow individuals currently without access to a good-quality occupational pension to save in other, non-pension, products before 2012 and then move to personal accounts. We propose a limit of £5,000 for subsequent years, but will consult on this."There will be a simple and self-certifying exemption test for employers who operate schemes of broadly equal value to personal accounts. In addition, we are consulting on whether companies that offer higher-value schemes should be allowed to have a reasonable waiting period before employees join the schemes. We are also interested to learn more about the NAPF's proposal of a good pensions scheme quality mark to help employees to identify companies that offer such pensions. "The Government are committed to minimising the burden of personal accounts on employers. Mandatory employer contributions will be phased in over at least three years. The reforms have to be simple to run for a small employer. The central clearing house will mean that employers need have only one point of contact for transferring contributions. The Government will make minimising the administrative burden on employers a key task for the delivery authority and subsequent personal accounts board."The vast majority of people can expect to benefit in retirement from saving in personal accounts or an equivalent scheme. Of course, all forms of saving have some uncertainty, but thanks to our reforms those who work or care throughout their working lives can expect to be better off from having saved. Indeed, now someone need only work or care for 24 years to avoid pound-for-pound withdrawal. Under existing rules, even the tiny minority of pensioners who receive the guarantee credit only could still see a return from their saving by taking a lump sum."Simple, low-cost, flexible and portable as people move jobs, personal accounts may generate an additional £4 billion to £5 billion of net new saving each year, equivalent to about half a per cent of GDP. They will help millions of people to take greater responsibility for building their retirement savings and embed a new pensions savings culture at the heart of a comprehensive and balanced pensions settlement. "These reforms set a sustainable and sensible course. They are in the long-term interests not only of this generation, but of generations to come, and I commend the White Paper to the House".
	My Lords, that concludes the Statement.

Lord Skelmersdale: My Lords, the House will be grateful to the Minister for repeating the Statement, the first of three this week, this time on pensions—not three from the noble Lord, I hasten to add, but I gather that we will get another one very shortly. Now we know—or do we?—what the body to be set up under the Pensions Bill is expected to be preparing for: setting up a fallback pension scheme to be, as I understand it, ultimately provided by the private sector.
	However, before I get on to that, we should put the Statement into context. When the Government took over the country in 1997, we had a pensions regime that was the envy of the world. What did they do? They started by removing advance corporation tax. By so doing, they produced a double whammy for pension schemes. The net effect was to remove £5 billion each and every year from the purchasing power of pension schemes—which, as much of the schemes' investment is directly in the Stock Exchange, damaged that, too. The Minister must be as bored as I am with responding to me on this, but I will be going on and on—and, if necessary, on—until I get convincing answers.
	The Minister said two things to me on Thursday last when we were discussing the freeing up of the financial assistance scheme. First, he said that the Government do not recognise the £5 billion figure. In that case, I put it to him directly: what figure does he recognise? What has been the effect on the Treasury's books of removing advance corporation tax? He also said that,
	"the fall in the stock market during that period"—
	I assume that he meant 1997 to 2004—
	"was greater than these figures—even if we accept the £5 billion, which I do not".—[Official Report, 7/12/06; col. 1331.]
	I challenge him again: will he now admit that the FTSE fell further than it would otherwise have done?
	Whatever the answer to those questions, I wonder whether even now we know what there is to be in next year's pensions Bill. Noble Lords will know that, in the Budget in April, the Chancellor removed the necessity for people to take an annuity from their SIPPs at age 75 and allowed a drawdown of capital sums at various points. Lo and behold, in last week's Pre-Budget Report, he signalled the removal of that beneficial act. He is to make pensioners either take an annuity, and thereby pass their pension pot on to the insurance company that arranges that annuity, or leave it to the state via a staggering tax of 80 per cent. That does not smack of consistency, so how do we know what changes there will be between today's announcement and the Bill next year?
	What the Government are now doing is seeking yet again to persuade the 50-odd per cent of people who do not invest for their retirement to take a pension. They tried to do that in 2001, when they introduced stakeholder pensions, a scheme not marked by conspicuous success. I am told that only 10,000 people took them up. As a result of today's announcement, the Government are expecting between 7.5 million and 10 million people to be attracted to the national pension scheme—quite a different order of magnitude, and I wish them well.
	In this Statement, there genuinely is much to agree with. However, I would not be doing my job unless I did a certain amount of cross-questioning. The national state pension scheme—or personal accounts, as the White Paper calls them—will apply to everyone in employment who earns over £5,000 a year. People will be automatically enrolled into the scheme if they are over 22 and below state pension age. There is some confusion here; I wonder whether they actually will be. The executive summary says that they will be eligible for automatic enrolment—hence my confusion. Will they be able to opt out, as the commission of the noble Lord, Lord Turner, recommended? Why have the Government chosen a £5,000 cap, rather than the £3,000 that the Turner report recommended? Even with a £5,000 cap, the Pensions Policy Institute calculates that under this reform up to 50 per cent will remain on means-testing. Is this really what the Government want to happen?
	Most important, many employers have pension schemes into which both they and some of their employees contribute much more than the 4 per cent and 3 per cent respectively that the Government are proposing. What is going to prevent employers from closing their existing schemes and opting for these new personal accounts, which would be so much cheaper for them? They are already closing final salary schemes in favour of defined contribution schemes at a rate of knots—a reduction of 30 per cent in 2005 alone, I am told.
	These proposals are likely to do damage to the pensions that already exist. The Government propose to increase the cap to £5,000. Will this not dramatically increase the scope of personal accounts? How many people put more than £5,000 into a pension? This is money that would previously have gone into the private and existing pension sector. Both these features would almost amount to nationalising occupational pensions. This cannot be what the Government either intend or want—at least, I hope not.
	That said, there is much to be said for what the Government are trying to achieve, which will, I am sure, provide many more employees with some savings for their retirement. However, people will want to know what to expect. Will the Government publish projections, as the private sector does, at varying levels of age, contributions, percentage growth, dates and so on? What is someone aged 23 on £12,000 a year to expect when they come to retire aged 68—that is, in 45 years' time—after 2012 when this new scheme comes into operation?
	There is a glimmer of hope on page 33 of the report. I see in the second chart that someone investing £1 of their income would expect to receive—via, I assume, an annuity, although I shall double-check this with the Minister in a minute—£255 when he comes to retire. For someone on median earnings of £22,000 a year, that is a contribution of £920. If you multiply that by 2.55, you get the marvellous sum of £2,346 extra income in retirement. I cannot say that that is Earth shattering, and I am sure that noble Lords cannot, either.
	I welcome the Statement, but these and many other questions still have to be answered before there is any hope of reaching the consensus that both we and the Government are seeking on pensions.

Lord Hunt of Kings Heath: My Lords, I thank noble Lords for their comments. Before turning to personal accounts, perhaps I may respond to the noble Lord, Lord Skelmersdale, on advance corporation tax. We do not recognise the figure that he has put forward. Many other factors were considered on the pensions to which he referred. I want to bring a new illustration to the table. I do not know whether the noble Lord saw the article written by Anatole Kaletsky in the Times on 19 October 2006 on this issue. He refuted that changes to advance corporation tax were the root cause of the problems for the pension industry. He said:
	"Occupational pensions and life assurance were destroyed by foolish court judgments and well-meaning but misconceived regulations under the Thatcher and Major governments".
	He said that ACT was,
	"supported by most business leaders and tax experts".
	I have never seen Anatole Kaletsky as a particular friend of this Government, but I look forward to further comments from the noble Lord, Lord Skelmersdale, when we debate pensions again.
	Perhaps more seriously, I thank both noble Lords for their general support of the concept of personal accounts and auto-enrolment. Although they went on to make criticisms of the detail, general support is very important, because the whole point of the establishment of the Turner pension commission was to achieve consensus. I am still hopeful that we can carry on with a consensus approach and look forward to constructive debates when the two pension Bills reach your Lordships' House.
	I very much agree with the noble Lord, Lord Oakeshott, that low charges are very important. Clearly, for the target group of 10 million people with no private or occupational pension schemes, and who are medium to low earners, low charges are critical. In the remit that will be given to the personal accounts delivery authority, the requirement to achieve low charges will be very important.
	I was very disappointed by the comments of the noble Lord, Lord Oakeshott, when he suggested that this would not work and then referred to the reforms that we propose for the basic state pension and the reduction in national insurance requirements, which will ensure that many more women will get full basic state pension from its introduction. I believe that our changes to basic state pension are substantial and substantive and provide one of the core foundations for taking forward the personal accounts proposals. Of course, the personal accounts delivery authority will have to give careful consideration to the information given to individuals who have been auto-enrolled and. obviously, individuals will need to be helped to make the right decision. However, the Government believe that the large majority of them can expect to benefit. The risk of not saving is much greater than the risk of saving for most people. No guarantee can be given because saving, by its very nature, is aspirational because people are planning for an uncertain future. But we believe that within this target group personal accounts and auto-enrolment will very much enhance their retirement income and should be supported.
	The noble Lord, Lord Skelmersdale, asked about projections. Future directions will be very much a matter for the delivery authority. I stress the point made in the Statement. The personal accounts delivery authority will be established by statute but it will not be run by the Department for Work and Pensions. It will be run by people with professional expertise from the private sector, which will give a great deal of comfort to those who are auto-enrolled in the schemes.
	The noble Lord, Lord Skelmersdale, asked about the £5,000 cap and rightly said that it was larger than the original Pensions Commission suggestion. Of course, the Pensions Commission suggestion of £3,000 was based on an overall replacement rate of 45 per cent. Work undertaken shows that many people aspire to higher than that at around 67 per cent, which is a very good thing, and that is where the figure of £5,000 comes from. But it is subject consultation and obviously we will listen to comments on that.
	It is clearly very important to have a cap in terms of the relationship between personal accounts and the private pension sector in general. We are very clear that we want personal accounts to be complementary rather than competitive and having the £5,000 cap is one of the signals by which we can demonstrate that. The fact that we consider there should not be transfers in and out of personal accounts is another signal.
	I take note of the comment made by the noble Lord, Lord Oakeshott, about the issue of debt and the decisions that individuals should rationally take in relation to debt as opposed to auto-enrolment. In a sense, that underpins the report produced recently by the Pensions Policy Institute which looked at the whole issue of whether there are individuals for whom auto-enrolment would not be right. The noble Lord will know that the PPI's conclusion is that even though some specific people might be at high risk, in general it supports the introduction of personal accounts. It also makes the point that general financial literacy will be a very important component of taking these proposals forward. The noble Lord will probably know that the Treasury shortly expects to issue a long-term financial capability paper. Obviously that will be very relevant to those questions. My time is up.

Lord Howell of Guildford: My Lords, I am sure that your Lordships will be very grateful to the Minister for repeating the Statement on what I take it is an expression of what the Prime Minister calls his whole Middle East strategy. I confess that I have not yet seen a copy of the Statement although I made a number of requests to do so. Therefore, my reaction has to be immediate to what I have heard, which, as I say, appears to be an initial response to the Iraq Study Group.
	The situation is, indeed, appalling, as more slaughter in Baghdad this morning—and, it seems, almost every morning—confirms. It is entirely right that the Government should report, and keep reporting, to both Houses of Parliament on what is a very fast moving scene, as the Minister rightly says, especially since more than 7,000 of our brave troops are deployed in Iraq.
	In the light of the Iraq Study Group report, which the Minister mentioned and which has emerged since this House last debated the issue a week ago, when will the Government be in a position to set out their own fully considered proposals for a change in direction, given that President Bush has announced that he will tell the American people about that, and give his views, before Christmas? That is in the next few days. Or is that what we have just heard? I am not at all clear whether that was the definitive statement.
	High hopes were pinned on this report, which is certainly very blunt about what went wrong. It says that the situation in Iraq is "grave and deteriorating". That is a very different story from the line maintained until recently that improvement and success were on the way, as many of us obviously hoped. The report goes on to recommend a number of changes in the deployment and status of American troops and therefore, by implication, British troops, and to urge the rather obvious importance of somehow involving Iraq's neighbours in trying to stop its total disintegration, which is in nobody's interests.
	Has the Government's view on the conditions which must be met before the withdrawal of British troops changed in any way as a result of the report? Is it still the position that the troops will remain "until the job is done"? Is that still the stance after this report? What will be the objectives of the Prime Minister's forthcoming visit to the region? Will he make his own further assessment? What was the result of sending an envoy to Syria a few weeks ago? Have any parallel exploratory talks taken place with Iran as part of the whole Middle East strategy? What assessment have the Government made of the reaction of the Iraqi Government to the study group report's conclusions? Do the Government agree that Iraqi support and co-operation are absolutely vital if any change in strategy is to be successful? In particular, do the Government agree that any international contact group that is formed must have Iraqi involvement throughout? Have the Government noted the outspoken views of the Iraqi president, Mr Talabani, on the study group, which he obviously did not find at all helpful?
	Does the Minister agree that if other neighbouring countries are to be drawn into the rescue operation in Iraq, that will not be done by threats and conditions, since the allies are in no position to lay down any such conditions? Does he further agree that the positive co-operation of the rising Asian powers and of Russia must be secured? This is not just an Atlantic matter. That must be done both on Iraq and on the closely related issue of the Palestine-Israeli settlement. All that may be just as important as the outcome of any debate or study group report in Washington, and perhaps even more so. Does the Minister accept that whatever conclusions the policy-makers or their critics are reaching in Washington—whether to "stay the course" or change direction—they will not necessarily dictate or control the events that are unfolding in the Middle East?
	Does he agree that the missing piece of understanding—in all the views coming out of Washington last week, in the Bush-Blair press conference, in the media and in many of the comments of the pundits in newspapers on both sides of the Atlantic—is that the modern age of weaponry and technology has dispersed power massively away from the American superpower, for all its colossal might, and into the hands of the smallest, most lethal unit, the most vicious cell and the most malign clique? Iraq shows us that the age of ultra-asymmetric warfare has arrived. Does the Minister agree that that is the lesson that is facing us very clearly in all our thinking and new thinking about Iraq?
	Given the myriad of questions that legitimately arise from this situation, and the truly urgent need to carve out our own course, will the Minister press the Secretary of State and the Prime Minister to ensure that both Houses of Parliament receive a further report before the Recess and that a full debate on Iraq, the lessons and the prospects, can be held early in the new year?

Lord Wallace of Saltaire: My Lords, I can only extend my sympathy to the Minister for having to read out such a thin Statement, which has in its second sentence the words that our security strategy is not driven by the American political calendar. We all understand that should be understood as reading that our security strategy is in severe danger of being driven by the American political calendar.
	This Statement is clearly about the Iraq Study Group. It talks about our strategy and what we are doing, but it implies that actually our strategy is being defined in Washington, without very much influence from London. Indeed, if we want to exert influence in Washington, the Prime Minister has to go over there and do his best. The Statement says that the Iraq Study Group's assessment of the security situation is largely in tune with our own. We may be very glad to hear that. We would love to know a little more about what Her Majesty's Government's assessment is, since there has been no comparable inquiry in Britain and no comparable dialogue with Parliament or with Opposition parties. We are asked, as ever, to trust the Prime Minister.
	Furthermore, if our assessment of the situation is comparable to that of the Iraq Study Group, there are disturbing noises in Washington that President Bush does not agree with that. The Iraq Study Group, for example, says that we have to have a dialogue with Iraq's neighbours, including Iran and Syria; and President Bush has clearly said that he does not accept that. What are Her Majesty's Government going to do about the divergence of view between official Washington, the rather wiser statements of the members of the Iraq Study Group, and the opinions of Her Majesty's Government? It is not surprising that in view of that the Prime Minister looked extremely uncomfortable at various points during the joint press conference.
	For the rest, we are unhappy about some other aspects of the Statement. We have again been told that 14 of the 18 provinces are relatively peaceful, but the other four are by far the most important and heavily populated. We are told that the British will hand over our provinces one by one, with two more to go as situations improve. What will happen if the British have completed handing over our four provinces before the United States has finished with its remaining three? Do we leave ahead of the Americans or do we wait for them before we do so? After all, they may wish to leave with much of their equipment through Basra.
	We are told that we will hand over when it is right to do so, which I take as meaning that we will hand over when the Prime Minister considers that is right to do so. This is not a satisfactory report. The Iraq Study Group has now set a rather more constructive direction for American policy, which we know the British follow, and we find ourselves yet again without influence in Washington as a substantial amount of influential opinion there does its best to rubbish the report of the Iraq Study Group. As ever, that leaves us in a deeply unhappy situation.

Lord Garden: My Lords, the Iraq Study Group was not the only body advising the American President. He has now had advice from another group which is composed predominantly of retired senior military officers. I believe he received the advice yesterday. Does the Minister know what that advice was, and can he confirm reports from some members of the group that it was effectively completely contrary to the advice of the Iraq Study Group and apparently met with the approval of the President and the Vice-President? Under those circumstances, how does the Minister see the strategy going ahead, if we think the Iraq Study Group have got it right but the President thinks that his retired military advisers have got it right?

Lord Eden of Winton: My Lords, the Statement made welcome reference to the increase in the size of the Iraqi armed forces and to their success in recruitment, but it made little reference to the Iraqi police forces. I think it is widely known that they are not totally reliable and have been substantially infiltrated by insurgent elements. Can the Minister tell the House anything about the state of the Iraqi police forces, whose activities are most important in curbing the horrors that are going on there?
	The Minister also referred to the need to getthe peace process back on track. He talked about the consequences of what happened in Lebanon. Do the Government fully understand what great damage has been done to the peace process and particularly to Lebanon as a result of the Israeli action, which the President and the Prime Minister appeared to condone? They certainly did not make any protest against it or any attempt to halt it. The damage has been far reaching, not just in its physical impact on Lebanon but also in its effect on the political situation there. We are yet to see what could develop as a result of the danger arising from the strength of Hezbollah as a result of Israeli action.

Baroness Pitkeathley: My Lords, I thank the noble Baroness, Lady Greengross, for the opportunity to debate this important issue, even though there are only a few of us who want to do so. NICE does a fantastic job. Setting it up was far-sighted and visionary. As it must, it takes decisions with reference only to the efficacy of the drugs and treatment that it regulates. We cannot expect NICE to consider the knock-on effects of its decisions, but that exemption does not apply to the rest of us and certainly not the Government. We are not considering only NICE decisions on drugs; clinical decisions such as delayed operations or early discharge clearly have an effect on other people and departments. Nowhere is that more apparent than in the effects on the patient or potential patient's family, who, as we heard from the noble Baroness, are often the main carers.
	Clinical decisions can affect a carer's ability to work, their stress levels, physical health and overall quality of life. How these costs are borne by other departments and agencies is perhaps best illustrated with an example provided by Carers UK. Let us look at the example of a couple in their early 50s who still have children at school. The husband is in the early stages of Alzheimer's disease and therefore could benefit from the drugs. We will call the carer "Jean". Since her husband had to give up work, she is the main breadwinner. Without the drugs being prescribed for him, Jean, too, is on the verge of giving up work. If her husband had received the drugs, perhaps she could have stayed in work for a few more years, which is critical, given that she is part of a final salary pension scheme, and her children would then be old enough to go to university or to work.
	What are Jean's costs and what other departments are affected? The carers' family allowance and benefits that they would not have otherwise claimed from the Department for Work and Pensions are over £7,000 a year, which does not include the administrative costs. Jean is no longer contributing to her pension. This affects the Treasury, through future loss of tax once Jean has retired, and the wider economy through the loss of her greater spending power. Jean is no longer paying national insurance credits, as she is not in work, so that is a loss to the Exchequer. She is no longer paying tax, and that affects the Treasury too. Like many carers, Jean is depressed because of the stress and the lack of choice about giving up work to care. She has been prescribed anti-depressant drugs, a Department of Health cost. The company that she has had to leave has had to recruit a new worker. This will cost it £12,000 in profit; the Treasury receives less in corporate tax.
	We must also consider the longer-term costs, because Jean may now never return to the labour market—in fact, she probably will not—and that will affect the Department for Work and Pensions, the Department of Health, the Department of Trade and Industry, the Department for Education and Skills and, again, the Treasury. The total costs are likely to be larger than the direct costs of either drugs or substitute care to the Department of Health.
	Other clinical decisions affect carers. The decision to prescribe one drug over another may mean that someone copes better and the carer has to do less. This happens in treatments such as that for Parkinson's disease, where the balance of the drugs is extremely critical. But the carer's opinions about how drugs affect people are often not taken into account. This is often for the very best of motives on the part of the prescribing clinicians—they do not want to trouble the carer—but what the carer feels is something less than a partner in the provision of that care. The decision not to carry out an operation but to wait for a more productive time for either the service or the patient can often make the difference between the carer giving up work or staying in work.
	We should never forget that there are 6 million carers—I remind your Lordships of this endlessly; I am sorry to be boring—one in five carers gives up work to care, and carers save the state about £57 billion a year. As we have heard, carers are twice as likely to suffer ill health, both physically as a direct result of caring—for example, from back injury—and from the huge effects of stress through confinement in the home and the fact that the caring takes place in a relationship. As we all know, relationships are not all sweetness and light, even when you do not have caring imposed on you, and emotional stress can take a very severe toll on the carer.
	This problem is not going to go away. Carers UK estimates that, in 20 years' time, we shall need 3 million more carers to cope with the demographics in our society. We will have to address this issue over the next few years.
	The Government have a fine record on carers, which is the envy of the world. I do not say that lightly. I speak on carer issues throughout the world and I see the envy—the wonder even—in which our country is held for the way in which it was the earliest to address carer issues and to do many things about them, from the three Acts of Parliament for carers to the latest influence on pensions and the Work and Families Bill, which provides for more flexible working.
	We have a fine record on carers, but perhaps the Government could be persuaded to do a few more things. For example, could the Department of Health evaluate how clinical decisions are liable to have an impact on carers, perhaps as part of the review of the National Carers Strategy, to which the Government are committed? Would it be possible to issue guidance to clinicians about taking the carer situation into account—specifically, if we need to limit it, the carer's ability to go on in paid work and the knock-on effects of that?
	The Government's commitment to preventive initiatives, as outlined in Our Health, Our Care, Our Say, is very welcome. Too much care is focused on crisis situations, with many local authorities withdrawing early intervention—intervention which can enable carers to go on caring for much longer. It makes very sound economic and moral sense to support carers—I know that I do not have to convince your Lordships of that. We must continue to move on with this policy if we are to ensure that caring families will continue to be supported as they deserve.

Baroness Barker: My Lords, I declare an interest as an employee of Age Concern England. I thank the noble Baroness, Lady Greengross, for shining light on this dimly lit recess of health and social care policy. It is a much needed illumination as we tread the path towards the Comprehensive Spending Review, which will have a significant impact on all aspects of health and social care.
	As the noble Baroness said, the debate has been prompted by the public reaction to decisions on the availability of drug treatments for Alzheimer's and the NICE pronouncements. I will focus most of my remarks on that issue, but there is one other thing I want to mention which is in danger of passing unnoticed.
	Unfairly, in my view, much of the criticism has been directed towards NICE and its approval statements. As health spokesperson, I meet lots of people who work in and around the health system, and I wish I had a pound for every time I heard the phrase "I am a big supporter of NICE, but...". NICE is extremely important but it has been dealt an almost impossible hand. It is one thing for the Monetary Policy Committee of the Bank of England to make technical decisions on a narrow matter about which there is a large degree of consensus; it is something else entirely to be given the task of making clinical, technical decisions in an environment where there is neither technical, economic nor political consensus on matters which are highly emotive in social and personal terms. That is what NICE has been asked to do.
	In the wake of the Herceptin judgment, a technical judgment made in the face of an aggressive, emotive campaign funded by the supplier of the drug, it is important that politicians reaffirm their true support for NICE and, at the same time, take responsibility for political judgments such as allocation of resources, which NICE should not be expected to make.
	We live in an age, and will do so for the foreseeable future, in which new drug therapies will emerge that offer people hope—sometimes the only hope—of survival or the only hope for added years of life. For both groups, there is a huge benefit to carers and relatives. At the moment, the availability of those drugs offering hope is determined by a combination of NICE judgment and PCT budgets, yet decisions on budgets are made nationally only. Would the Government consider whether funding could be reserved for each primary care trust each year to enable it to purchase new drugs as they are licensed, come on-stream and achieve NICE approval in the middle of a financial year? That fund could be available for clinicians to use as they saw fit in response to emerging local need.
	The noble Baroness, Lady Greengross, talked about the four licensed drugs for Alzheimer's—Aricept, Reminyl, Exelon and the most recent drug, Ebixa. She also talked about the cost of prescribing them, which is about £2.50 a day. NICE agrees that those drugs are clinically effective but they are not cost-effective enough to be provided. By law, NICE is allowed only to consider the costs and benefits of the treatment to the NHS and to statutory social services, as well as the impact on an individual patient. If a treatment provides wider social benefits—for example, to carers—that factor is excluded from the evaluation process. That is wrong; the system should be changed so that NICE, in conjunction withthose responsible for resource decisions, can make those decisions. In principle, if NICE could make those judgments it would be allowed to get on with its job. It would be wrong, in those circumstances, for non-expert politicians to attempt to influence politically the process of evaluating the cost-effectiveness and clinical effectiveness of treatments.
	However, we are not in that situation in the case of these drugs. There are concerns about the way the appraisal of these drugs was carried out. Why did the appraisal not include the potential need in the NHS of treatment for aggression, which Alzheimer's patients may need if they do not get these drugs? Is the use of the quality-adjusted life year appropriate as a measure for people with dementia? Why did the guidance from NICE fail to clarify that it should not apply to people with a learning disability? How independent is the NICE appeal process when, as the noble Baroness, Lady Greengross, said, the majority of the members of the appeals panel were members of NICE?
	I, too, shall touch briefly on the issue of carers. There are 6.8 million of them in Britain, 80 per cent of whom are under 65. The noble Baroness, Lady Pitkeathley, can tell us in her sleep about the difficulties they have achieving flexible working arrangements and moving to part-time work. Many of us in this House now know that as well as she does, and I am glad she keeps reminding us. However, the cost of caring has an impact well beyond the point at which the carer has to carry out their caring activities.
	Dr Maria Evandrou of the LSE has contributed a number of different studies on the continuing effects on, particularly, the pension contributions throughout retirement of people who have had caring responsibilities. It is not just occupational pension schemes that are affected, as the noble Baroness said, but quite often, particularly in the case of women, entitlement to the basic state pension. They simply do not have enough qualifying years to be eligible for a full basic state pension, so that they then go on to accumulate an enduring entitlement to pension credit. That, set against the cost of the drug treatments that might enable them to continue working while the person they are caring for is in the early stages of Alzheimer's disease, needs to be calculated by NICE, not by itself but in conjunction with those responsible for resource decisions.
	I shall briefly mention one other decision; it is not exactly a clinical decision, but it is a medical one, and it will have a significant impact on older people, in particular those with Alzheimer's and their families. The NHS is about to announce a tightening of the criteria for NHS continuing care. At present 20,000 people are deemed to be in need of nursing care, and they have their costs met by the NHS. Social services departments and campaign groups have already said that the existing criteria and the Department of Health's interpretation of them are so narrow that a further 75,000 people are being denied care, or having to pay for their own care, when it should be met by the NHS. A series of court judgments and statements by the ombudsman have backed that up and said that the NHS should be more lenient in its interpretation.
	If a person with Alzheimer's needs to be fed and washed, that is nursing care, not personal care, yet at the moment for many people it is being judged differently. If the Government make those criteria even tighter, more people will have their care funded, not by the NHS, but by social services. Estimates suggest that that would add an average £5 million to the social services bills, which equates to an extra 1 per cent on council tax bills. The number of people living with dementia, particularly Alzheimer's, is set to rise, so those costs could be even higher than anticipated.
	The noble Baroness, Lady Greengross, talked about the increasing number of people who will live longer with conditions such as Alzheimer's. We also know it is most likely that people who are very elderly and live for a long time live in areas of greater affluence; therefore, there is a correlation between not just the number of older people living longer but the places where they live. That means that there will be disproportionately high costs in some areas and for some statutory authorities. I have not yet seen anything from the Government that has reflected the disparity of costs across different areas.
	The future for people with Alzheimer's and their carers is bleak, and the combined effect of those two judgments will make it even bleaker. At a time when the NHS locally and social services are being forced to find ever more cost-efficient ways of providing treatment and care, should not central Government face that same discipline? If they did, they would come to different judgments about the actual cost, across the piece, of care and treatment. It is time for some joined-up thinking.

Baroness Royall of Blaisdon: My Lords, I am grateful to the noble Baroness, Lady Greengross, for enabling us to have this debate on such a key issue. I wish that more noble Lords were present this evening, but clearly we have quality if not quantity. I am glad to see the noble Baroness, Lady Verma, on the Front Bench opposite. It is the first time that I have had the pleasure of addressing her across the Dispatch Box.
	The noble Baroness, Lady Greengross, has a fine record, especially on age-related matters, and the concerns that she raised today are clearly important in relation to her work with the International Longevity Centre, the Alliance for Health and the Future, and Care and Repair. I very much welcome the opportunity to respond to her comments and those of the noble Baronesses, Lady Barker, Lady Pitkeathley and Lady Verma.
	I also welcome the emphasis that there has been this evening on carers. As a society, we are indebted to the more than 6 million carers that we have in the UK, but as my noble friend Lady Pitkeathley stated, the Government recognise the tremendous contribution that carers make to our society and the importance of supporting them. We have done much to improve their lives. For example, we set up a carers' helpline to help them deal with emotional stress and to provide practical advice and we brought forward the expert carers' programme, which offers support and gives carers the skills to carry out their vital role. There is much more that we are doing and much more that we should do; and we will persist in this.
	The National Institute for Health and Clinical Excellence—NICE—was established to give advice to the NHS on best clinical practice, including the clinical and cost effectiveness of drugs and other treatments. I assure the noble Baroness, Lady Verma, that cost is not the only issue that is examined. NICE has achieved a huge amount in the past seven years and has a broad base of support across Government, the health professions and the pharmaceutical industry. I was glad to hear that this evening in the Chamber. Few would question the value of its recommendations or its integrity, although its work can inevitably be controversial. We owe it our strong support, but clearly it is also right that we debate and question the way in which it works, and the way in which NICE guidelines relate to government priorities such as prevention, community care, tackling inequalities and dignity and care.
	NICE is well known for operating in an open and transparent way. Since its establishment in 1999, the institute has striven to make available in the public domain much of the information used in its guidance development process. Furthermore, NICE has responded positively to recommendations made over the years to make even more information available. The methods by which NICE reaches its conclusions are also readily available and are subject to much scrutiny. Open discussion of NICE's processes and methods is of course vital to the institute's continued development and success, and is to be encouraged. NICE publishes the manuals for all its guidance processes on its website, where they are freely available for public scrutiny. I had a good look at the NICE website today, and it is very well managed and easily accessible.
	I fully appreciate that some of the issues cited by noble Lords today have also been discussed with reference to recent appraisals published by NICE. Significant questions have been raised in this House and more widely about the way in which NICE conducts its vital, but sometimes difficult, work. Some of the issues concern NICE's methodologies and related issues of health economics. It would not be appropriate for me to go into detail on specific appraisals that are the subject of appeals and, in one case, the possibility of a judicial review. However, I note what noble Lords have said about Alzheimer's specifically. While I cannot make detailed comments, I would say that the technological appraisal for Alzheimer's drugs needs to be seen as part of a package with NICE's clinical guideline on the treatment and care of people with dementia, which was published jointly with the Social Care Institute for Excellence on 22 November. The clinical guideline complements the guidance on drugs by making it clear what care and support should be provided to people in all stages of Alzheimer's disease. Indeed, it also addressed the needs of carers as well as those who suffer from dementia.
	Some criticisms of NICE have underestimated the sophistication of its methodologies and the wide range of factors that it already takes into account. NICE's assessments reflect all aspects of benefit to health arising from a treatment. That includes the benefit of improved health, but crucially, also the benefit derived from things that a patient can do because they are feeling better; for example, going to work. Because such benefits are already covered in NICE's methodologies, separately taking account of wider economic benefits runs the risk of double counting.
	I am aware that NICE has been accused of carrying out its appraisals on too narrow a cost base by excluding indirect social costs arising from the use of a treatment and therefore creating cost pressures for other government departments. However, as I have already stated, NICE is able to take into account wider societal benefits, and this is explicit in the institute's Guide to the Methods of Technology Appraisal.
	I note noble Lords' comments that the appeals process is not truly independent. I believe that it is independent of the guidance development process. The appeal panel is chaired by a non-executive member, has two independent third parties and usually two other non-executive directors of NICE who have had no previous involvement in the appraisal in question. Appeal hearings take place in public and the panel's considerations and conclusions are published. However, the appeal system will be within the scope of NICE's review of the appraisal process and methods, which I shall speak on later. I urge noble Lords to participate in that review process, particularly in relation to appeals.
	I do not pretend that these are simple issues; indeed, we must expect that NICE as a global leader will have to deal with many issues on which there is no universal agreement in terms of the science and methodology. I am sure that noble Lords will understand that, as in any complex field, the specific approaches that NICE adopts will have both their supporters and critics. This is to be expected and it is healthy. NICE is willing to learn in the development of its appraisal methodologies. Noble Lords will be aware that the processes adopted by NICE are not static. The institute has a well earned international reputation for operating at the cutting edge of technology assessment, which was reflected in the review of NICE's technology appraisal process, carried out by the World Health Organisation in 2003. The WHO marked out NICE's appraisal methods as setting something of a gold standard and stated that they represented an important model for technology appraisals internationally.
	For NICE to remain at the cutting edge, its processes must of course develop over time. The noble Baroness, Lady Verma, suggested that the methodology of appraisals needed to be re-examined, but she and other noble Lords will be glad to know that NICE's guidance development processes are subject to periodic review, which includes public consultation. Its technology appraisal process was last subject to such a review in 2003-04. That process involved full public consultation and extensive work with academics, patient groups, the NHS and industry. NICE will be undertaking a further scheduled review of its appraisal methodology in 2007. In addition, I understand that the Health Select Committee has announced its intention in 2007 to hold an inquiry into NICE, following its 2002 inquiry, although the terms of reference have yet to be published.
	NICE's review will again involve active engagement with key stakeholders, including patient groups and academics, and a public consultation. I understand that the review will potentially cover a range of issues, including how NICE considers carer benefits, the use of the quality-adjusted life year (QALY)—as was raised by noble Lords—and the way that NICE takes account of wider societal benefits. In keeping with its open and transparent mode of operation, NICE will publish details of this review in due course. I urge all stakeholders in NICE guidance, including noble Lords, to support the consultation next year and engage in the process. This debate is timely, because only through healthy public debate of its work will NICE improve further and consolidate its position as a world leader in the field.
	The noble Baroness, Lady Barker, raised the question of a special fund for drugs. She will not be surprised to know that that would not be compatible with the Government's policy of allowing local health services to take decisions on how they can best meet the needs of their patients. There is no pot of gold hidden in the Department of Health. Every penny used to set up the fund would come out of allocations to primary healthcare trusts. However, I hear what the noble Baroness says and I undertake to explore the matter a little further.
	The noble Baroness, Lady Verma, asked about NICE's engagement with drug companies. It has a dialogue with drug companies both generally and through consultation and specific appraisals. The industry's views will also be important as part of NICE's review of process and methods.
	Many noble Lords referred to benefit payments and the potential for NICE to take formal account of the impact of health interventions on benefits such as those paid by the Department for Work and Pensions. Although the aim of such a suggestion might be to ensure that any savings accruing from better health in the form of reduced benefit payments are taken into account, the effect might not be quite as intended. However, I think that noble Lords were looking at a broader aspect of that issue.
	The NHS devotes significant resources to healthcare interventions for elderly patients, many of whom may be retired and receiving a state pension and possibly other benefits. If a healthcare intervention prolonged the life of someone in receipt of such payments, the cost to the state in pension and other benefits would increase, not decrease, as a consequence of investment in that intervention. I am sure that none of us would want to see that kind of reasoning factored into an appraisal, but it illustrates that we cannot assume that healthcare interventions will reduce spending on benefits. Therefore, taking such interventions into account would not necessarily lead to a more favourable account.
	It is important to continue to debate these issues, and clearly the focus of the debates will evolve as NICE's processes and methodology evolve. I hope that there will be real interest in the consultation on NICE's appraisal methodology next year, and I expect continued interest in how the institute responds to the comments received. Noble Lords should be reassured that there is a proper and public process for identifying and systematically addressing the kind of important issues that we have been discussing today. Indeed, I am sure that many of the issues raised in today's debate will affect the way that NICE works in future. There are many challenges ahead for NICE but I am absolutely confident that it is up to the challenge.